Energy and Commerce Dems Reach Partial Deal on Climate Energy

CongressDaily AM for Wednesday, May 13, 2009

By Darren Goode, with Humberto Sanchez contributing

House Energy and Commerce Democrats Tuesday unveiled a partial agreement
on a climate and energy strategy, including on a renewable electricity
mandate and some key pieces of how a cap-and-trade program would affect
businesses.

Energy and Commerce Chairman Henry Waxman said after a closed-door
meeting
of panel Democrats that enough of them will support the bill in the
committee next week to send it to the full House. "We still have some
issues to work on, [but] I think we have the basis for an agreement,"
Waxman said. "I believe we will have the votes for passage of this bill
next week."

Rep. Jay Inslee, D-Wash., said, "I think the most important and most
salient issues appear to have broad consensus."

Others stressed they want to see for themselves even those items
supposedly ironed out. "It's gotta be in writing, man," Rep. Bart
Stupak,
D-Mich., said. "You know what happens to deals, especially those verbal
ones."

Waxman said the bill's text will be released Thursday and a markup will
start Monday. Energy and Commerce ranking member Joe Barton said panel
Republicans -- who held a meeting at the same time Democrats held theirs
--
are unified in opposition.

Committee Democrats have verbally agreed to a goal of reducing U.S.
greenhouse gas emissions 17 percent by 2020 using a cap-and-trade
program,
a slight reduction of the 20 percent target Waxman and Energy and
Environment Subcommittee Chairman Edward Markey, D-Mass., floated before
the spring recess.

The 17 percent goal is in the middle of a range recommended by the
environmentalist-business U.S. Climate Action Partnership. The
longer-term
reduction goals Waxman and Markey initially proposed -- including an 83
percent reduction by 2050 -- are unchanged.

The bill would give 35 percent of cap-and-trade emission credits to
local
electricity distribution companies and is believed to allocate 15
percent
to industries such as steel, aluminum, chemical and glass. These deals
are
crucial for Waxman to earn support from coal-state lawmakers like Rep.
Rick
Boucher, D-Va., and manufacturing-state members like Rep. Mike Doyle,
D-Pa.
Boucher said Tuesday that more negotiating on the overall bill is
needed.

No deal has been reached on free emission credits going to the refinery
industry. Rep. Gene Green, D-Texas, said oil-patch Democrats will meet
with
Waxman on that today. Of those Democrats, Green said he thinks he and
Rep.
Charles Gonzalez, D-Texas, could support something at the end of the
day.
Getting support from others like Reps. Jim Matheson, D-Utah, and Charlie
Melancon, D-La., seems less likely. Green is still negotiating details
of a
low-carbon fuel requirement, including making sure it does not overlap
with
a renewable fuels requirement in current law.

The renewable electricity mandate would require electric utilities to
produce 20 percent of their electricity through a combination of
renewable
sources and energy efficiency by 2020. The mandate stipulates a
"20-by-2020" mandate, with states allowed to meet 5 percent of that
through
efficiency efforts. But if a governor of an affected state argues that
it
cannot meet that requirement, that state can then use efficiency efforts
to
meet another 3 percent of that mandate, effectively creating a 12
percent
renewable production mandate for that state. There is no separate energy
efficiency standard for utilities, as Waxman and Markey initially
proposed.

The inability to meet a 25 percent by 2025 requirement initially
proposed
by Waxman and Markey was a particular concern for Southern Democrats.
Rep.
G.K. Butterfield, D-N.C., though, said he is fine with the compromise.
"I
can support it as it's written," he said. The definition of the sources
that be used to meet the mandate was expanded from one approved by the
House two years ago to include more biomass -- an important source in
the
South -- and energy produced from waste.

It does not include nuclear -- which Republicans and some Democrats like
Butterfield wanted -- but nuclear construction will be excluded when
determining the baseline of the mandate.

Democratic pollster Mark Mellman spoke to the broader House Democratic
Caucus later Tuesday night to try to help on messaging and selling a
bill.

The only agreement in the bill publicly announced heading into Tuesday's
committee meeting was on "cash for clunkers." Sen. Debbie Stabenow,
D-Mich., Tuesday said she thought final House-Senate language on that
could
be agreed to this week. She said the goal is for both chambers to move
identical plans and to find a faster vehicle than broader climate and
energy legislation.

Senate Majority Leader Reid said he wants to put it in a war
supplemental
spending bill that Congress is aiming to send to President Obama by the
end
of next week. "I think it's that important," Reid said. He said there
are
procedural problems, though, because it would be authorizing on a
spending
bill, a problem that can either be solved by getting unanimous consent
or
aiming for 60 votes.

Senate Environment and Public Works Chairwoman Barbara Boxer said she
will
probably have workshops on whatever House climate bill is produced to
see
how it matches up with a cap-and-trade bill her committee approved last
year. "But we will definitely utilize a lot of their work because we
took
the first step, which is to see who had problems," Boxer said. "They
knew
where the problems were because we had that dry run. And they went right
to
where the problems were, and it looks like they are going to resolve
them,
so that is extremely helpful to us in getting a bill through." She said
she
is "very comfortable" predicting that the Senate will take up its own
cap-and-trade bill this year.

Meanwhile, Senate Energy and Natural Resources Chairman Jeff Bingaman
will
face quite a few amendments from both parties at a markup today on draft
plans to set up an electricity transmission network that would be part
of a
broader energy plan that Reid might combine with any cap-and-trade
program
that emerges from Boxer's panel.

A spokesman for Energy and Natural Resources ranking member Lisa
Murkowski
sent an e-mail Tuesday afternoon saying 28 amendments -- including 16
from
Democrats -- were filed on Bingaman's draft transmission plan. Of those,
seven had been cleared at that point, with more amendments expected.

A planned vote in the full Senate today on the nomination of David Hayes
to be deputy Interior secretary will temporarily disrupt the markup.
Murkowski and Sen. Robert Bennett, R-Utah, have holds on his nomination
because they are seeking answers to questions they have about the
administration's cancellation of Utah oil and gas leases, delay of a
five-year offshore oil and gas drilling plan and decisions regarding the
Endangered Species Act.

Murkowski spokesman Robert Dillon cast some doubt over whether there
would
be time at the markup to take up separate draft proposals dealing with
nuclear energy and cybersecurity. Bingaman's spokesman said the panel
was
unlikely to get to cybersecurity, which would be pushed to one of two
markups the committee is planning for next week on outstanding issues.

Those include oil and gas production on public lands and a renewable
electricity mandate Bingaman is negotiating with committee Democrats.
One
of those Democrats -- Stabenow -- said Tuesday she is fine with what has
been drawn up, but some colleagues, such as Sen. Blanche Lincoln,
D-Ark.,
say more work is needed. Bingaman wants to report a bill out of his
panel
next week and will leave the renewable production mandate and other
issues
for the full Senate if necessary.